Imperial Brands has increased its dividend by 4.5% after the tobacco company reported a rise in profits in its full-year results.

The group’s operating profit in the year to 30 September totalled £3.6bn, up 4.5% on last year, despite a slight 0.2% reduction in revenue over the 12 months to £32.4bn.

As a result, Imperial’s dividend has been hiked to 153.42 pence per share, as the group also confirmed it would move to four equal quarterly dividend payments for FY25 onwards.

Imperial revealed its “next generation products” (NGP), which include the e-cigarette brand Blu as well as several vape brands, had performed particularly strongly, with net revenues up 26.4% at constant currency.

In tobacco, where the group owns the Golden Virginia tobacco and Winston cigarettes brands, Imperial reported a 4% fall in tobacco volumes, although the firm said it had delivered “aggregate market share gains” across its five priority markets, while at the same time “delivering strong pricing”.

Imperial chief executive, Stefan Bomhard, said: “The investment we have made in consumer capabilities, cultural transformation and agile ways of working has supported another year of accelerated financial delivery and growing capital returns.

“These results demonstrate how we are fulfilling our role as an effective challenger for the industry, able to deliver consistently against operational and financial expectations.”

Head of markets at interactive investor, Richard Hunter, added that the “aggressive shareholder return programme” should continue to underpin Imperial’s share price.

“The total return has of late been impressive for Imperial,” Hunter added. “Apart from the additional dividend bonus, the share price has risen by 30% over the last year, as compared to a gain of 8.2% for the wider FTSE100, and the shares have now added 52% over the last three years while the transformation programme has been in full swing.

“Even after such a climb, the shares are not obviously expensive in terms of historic valuation. Despite the obvious concerns of changing habits and a more immediate drag from some large investors either unwilling or unable to buy tobacco shares, Imperial is maximising its current power, and the market consensus of the shares as a buy continues to reflect this bounty.”

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